IMF Executive Board Completes Review of Poland’s Performance under the Flexible Credit Line

Press Release No. 14/05
January 8, 2014

The Executive Board of the International Monetary Fund (IMF) today completed its review of Poland’s qualification for the arrangement under the Flexible Credit Line (FCL) and reaffirmed Poland’s continued qualification to access FCL resources. The Polish authorities have indicated that they intend to continue treating the arrangement as precautionary.

The IMF has supported the authorities’ policies with four successive FCL arrangements. The current two-year FCL arrangement for Poland was approved by the IMF’s Executive Board on January 18, 2013 (see Press Release No. 13/17) in an amount equivalent to SDR 22 billion (about US$ 33.7 billion). Poland’s first FCL arrangement was approved on May 6, 2009 for an amount of SDR 13.69 billion (about US$ 21 billion) (see Press Release No. 09/153). Successor arrangements were approved in July 2010 (see Press Release No. 10/276) and in January 2011 (see Press Release No. 11/15).

Following the Executive Board discussion on Poland, Mr. David Lipton, First Deputy Managing Director and Acting Chair, made the following statement:

“Poland continues to have in place sound macroeconomic management and strong fundamentals, including a well-established inflation targeting regime, a robust fiscal framework that balances short-term economic considerations with the need to preserve long-term fiscal sustainability, and an effective financial supervisory framework that has safeguarded financial stability.

“The FCL arrangement with the IMF has reinforced Poland’s capacity to deal with adverse external shocks, providing the authorities with needed flexibility to implement their macroeconomic framework, while rebuilding policy buffers and continuing structural reforms. Today, the Executive Board reaffirmed that Poland continues to meet the qualification criteria for access to FCL resources.

“The Polish economy is beginning to recover from a sharp slowdown. However, external risks remain elevated, including the possibility of increased financial stress in the euro area, a protracted period of low growth in broader Europe, and a sudden reversal of capital flows as advanced countries exit from unconventional monetary policies.

“Poland’s FCL arrangement, which the authorities continue to treat as precautionary, provides added insurance against these risks. The authorities intend to exit from the FCL arrangement as soon as external conditions allow.”